EUR/USD Range Breakout Indicates Reversal!

EUR/USD has finally managed to escape from two major patterns and now is signaling a further increase and a reversal in the short term. The USD was punished by the USDX's further drop, the index has fallen in the negative territory, so it is expected to resume the bearish movement, EUR/USD is expected to increase in this situation.

You should be careful today as the US is to release some high impact data, the Prelim GDP is expected to drop by 4.8%, the Durable Goods Orders could register a 19.0% decrease, while the Core Durable Goods Orders indicator may drop by 14.8% in April. The Unemployment Claims could decrease a little in the previous week, from 2438K to 2100K, while the Pending Home Sales is expected to remain deep in the negative area, a 15.0% decrease is predicted.

EUR/USD could move quickly towards new highs if the US data will disappoint later today, some good numbers could bring the pair down to test and retest the broken upside obstacles before it will resume the upside movement.

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The Daily chart shows us that the price has managed to escape from the triangle pattern and now it has managed to breakout and to close above the median line (ML) and above the 1.0990 range resistance.

I've said in all my latest analysis that the median line (ML) represents a critical dynamic resistance, a valid breakout above it would signal a significant increase towards the 1.1200 and higher towards the upper median line (UML).

The first target is seen at the R1 (1.1084) level, so only a valid breakout will lead the quote towards the 1.1200, 1.1215, R2 (1.1217) levels. I've said yesterday that Tuesday's bullish candle has indicated a breakout and a further increase.

  • EUR/USD TRADING TIPS

EUR/USD price can rise very easily without a retest of broken levels (ML, 1.0990, 1.1) and could approach the next upside targets. Still, a consolidation above the 1.0990 - 1.1000 area will give us a great chance to buy EUR/USD, having 1.1200 - 1.1215 area as a target in the first instance.

The extended range breakout has signaled an approx 200 pips growth for the upcoming period. The Stop Loss should be placed below the PP (1.0905), or maybe below the 1.0870 previous low, for now, only a consolidation (tests, retests) above the 1.0990 will give us the chance to move the Stop Loss higher.

The upper median line (UML) could attract the price in time if the dollar index will continue to drop towards the 98.00 level. A further increase could be invalidated only if EUR/USD will register a major bearish engulfing today after the US data will be published and if the breakout above the 1.0990 - 1.1 area will be invalidated.

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Indicator analysis. Daily review on GBP / USD for May 28, 2020

The pair traded upwards on Wednesday and tested 1.2360 - a 50% pullback level (presented in a blue dashed line). After that, a downward pullback took place and tested 1.2224 - a 50% pullback level (presented in a red dashed line). Today, the price is likely to begin to move up. Economic calendar news for the dollar is expected at 12:30, 14:00, and 15:00 UTC.

Trend analysis (Fig. 1).

Today, an upward trend is possible from the level of 1.2261 (closing of yesterday's candle) retargeting 1.2360 - a 50.0% pullback level (presented in a blue dotted line). In case of breaking through this level, the upward movement may continue with the next target of 1.2427 - a 61.8% retracement level (presented in a blue dashed line).

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - up;

- Trend analysis - up;

- Bollinger Lines - down;

- Weekly schedule - up.

General conclusion:

Today, the price may move upwards retargeting 1.2360 - a 50.0% pullback level (presented in a blue dotted line).

Another possible scenario is a downward trend from 1.2360 - a 50.0% pullback level (presented in a blue dashed line) with the target of 1.2323 - a 14.6% pullback level (presented in a red dashed line).

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Fractal analysis of the main currency pairs on May 28

Forecast for May 28:

Analytical review of currency pairs on the scale of H1:

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For the euro / dollar pair, the key levels on the H1 scale are: 1.1168, 1.1123, 1.1090, 1.1041, 1.1025, 1.0994, 1.0965 and 1.0933. Here, we are following the ascending structure of May 25th. The continuation of the upward movement is expected after the price passes the noise range 1.1025 - 1.1041. In this case, the target is 1.1090. Short-term downward movement, as well as consolidation is in the range of 1.1090 - 1.1123. For the potential value for the top, we consider the level of 1.1168. Upon reaching which, we expect a downward pullback. A short-term downward movement is expected in the range of 1.0994 - 1.0965, hence, there is a high probability of an upward reversal. The breakdown of the level of 1.0965 will lead to an in-depth correction. In this case, the target is 1.0933. This level is a key support for the ascending structure.

The main trend is the local structure for the top of May 25

Trading recommendations:

Buy: 1.1041 Take profit: 1.1090

Buy: 1.1092 Take profit: 1.1121

Sell: 1.0994 Take profit: 1.0967

Sell: 1.0963 Take profit: 1.0935

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For the pound / dollar pair, the key levels on the H1 scale are: 1.2566, 1.2515, 1.2438. 1.2361, 1.2259, 1.2208 and 1.2160. Here, we are following the ascending structure of May 25. At the moment, the price is in a deep correction. The breakdown of the level of 1.2208 will lead to the abolition of the local initial conditions. Here, the first goal is 1.2160. The continuation of the upward movement is expected after the breakdown of the level of 1.2361. In this case, the target is 1.2438. Price consolidation is near this level. The breakdown of the level of 1.2440 should be accompanied by a pronounced upward movement. Here, the target is 1.2515. For the potential value for the top, we consider the level of 1.2566. Upon reaching which, we expect consolidation, as well as a downward pullback.

The main trend is the upward trend of May 15 and the local structure of May 25

Trading recommendations:

Buy: 1.2361 Take profit: 1.2436

Buy: 1.2440 Take profit: 1.2515

Sell: 1.2257 Take profit: 1.2210

Sell: 1.2206 Take profit: 1.2160

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For the dollar / franc pair, the key levels on the H1 scale are: 0.9735, 0.9702, 0.9684, 0.9645, 0.9618, 0.9586 and 0.9564. Here, we are watching the downward structure from May 25. At the moment, the price is in correction. The continuation of the downward movement is expected after the breakdown of the level of 0.9645. In this case, the target is 0.9618. Price consolidation is near this level. The breakdown of the level of 0.9618 will lead to a pronounced movement. Here, the target is 0.9586. For the potential value for the bottom, we consider the level of 0.9564. Upon reaching which, we expect consolidation, as well as an upward pullback.

A short-term upward movement is possible in the range 0.9684 - 0.9702. The breakdown of the last level will favor the development of the upward structure. In this case, the first potential target is 0.9735.

The main trend is the formation of the downward structure of May 25

Trading recommendations:

Buy : 0.9685 Take profit: 0.9700

Buy : 0.9704 Take profit: 0.9728

Sell: 0.9645 Take profit: 0.9622

Sell: 0.9616 Take profit: 0.9588

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For the dollar / yen pair, the key levels on the scale are : 108.43, 108.31, 108.09, 107.91, 107.46, 107.24 and 106.77. Here, the situation is in equilibrium. Short-term upward movement is expected in the range of 107.91 - 108.09. The breakdown of the last level should be accompanied by a pronounced upward movement. In this case, the target is 108.31. For the potential value for the top, we consider the level of 108.45. Upon reaching which, we expect consolidation, as well as a downward pullback.

A short-term downward movement is possible in the range of 107.46 - 107.24.The breakdown of the last level will lead to the development of a downward structure from May 19. In this case, the potential target is 106.77.

Main trend: equilibrium

Trading recommendations:

Buy: 107.91 Take profit: 108.07

Buy : 108.11 Take profit: 108.30

Sell: 107.44 Take profit: 107.25

Sell: 107.20 Take profit: 106.80

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For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3942, 1.3873, 1.3829, 1.3758, 1.3705 and 1.3627. Here, we are following the development of the medium-term downward cycle of May 14. Short-term downward movement is expected in the range of 1.3758 - 1.3705. The breakdown of the latter value will allow us to expect movement to a potential target - 1.3627. Upon reaching this level, we expect consolidation, as well as a downward pullback.

A short-term upward movement is possible in the range of 1.3829 - 1.3873. The breakdown of the last level will lead to the development of an in-depth correction. Here, the potential goal is 1.3942. We expect the initial conditions for the upward cycle to be formed to this level.

The main trend is the medium-term downward trend of May 14

Trading recommendations:

Buy: 1.3829 Take profit: 1.3870

Buy : 1.3875 Take profit: 1.3940

Sell: 1.3756 Take profit: 1.3709

Sell: 1.3703 Take profit: 1.3637

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For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6792, 0.6760, 0.6705, 0.6666, 0.6614, 0.6585, 0.6552 and 0.6509. Here, we are following the development of the upward cycle of May 15. At the moment, the price is in correction. The continuation of the upward movement is expected after the breakdown of the level of 0.6666. In this case, the target is 0.6705. Price consolidation is near this level. The breakdown of the level of 0.6705 should be accompanied by a pronounced upward movement. Here, the target is 0.6760. For the potential value for the top, we consider the level of 0.6792. Upon reaching which, we expect consolidation, as well as a downward pullback.

Consolidated movement is possible in the range of 0.6614 - 0.6585. The breakdown of the last level will lead to an in-depth correction. Here, the target is 0.6552. This level is a key support for the upward structure and its breakdown will lead to the formation of initial conditions for the downward cycle. In this case, the target is 0.6509.

The main trend is the upward structure of May 15, the correction stage

Trading recommendations:

Buy: 0.6666 Take profit: 0.6705

Buy: 0.6707 Take profit: 0.6760

Sell : 0.6614 Take profit : 0.6587

Sell: 0.6583 Take profit: 0.6552

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For the euro / yen pair, the key levels on the H1 scale are: 120.24, 119.97, 119.51, 119.18, 119.00, 118.52, 118.25 and 117.77. Here, we continue to monitor the ascending structure of May 22. The continuation of the upward movement is expected after passing through the noise range of 119.00 - 119.18. In this case, the target is 119.51. Price consolidation is near this level. The breakdown of the level of 119.51 should be accompanied by a pronounced upward movement. Here, the goal is 119.97. For the potential value for the top, we consider the level of 120.24. Upon reaching which, we expect consolidation, as well as a downward pullback.

A short-term downward movement is possible in the range of 118.52 - 118.25, hence, the high probability of an upward reversal. The breakdown of the level of 118.25 will lead to in-depth correction. Here, the goal is 117.77. This level is a key support for the top.

The main trend is the local ascending structure of May 22

Trading recommendations:

Buy: 119.18 Take profit: 119.50

Buy: 119.53 Take profit: 119.95

Sell: 118.52 Take profit: 118.27

Sell: 118.23 Take profit: 117.85

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For the pound / yen pair, the key levels on the H1 scale are : 135.26, 134.28, 133.86, 133.16, 132.13, 131.65 and 130.98. Here, we are following the development of the ascending structure of May 15. The continuation of the upward movement is expected after the breakdown of the level of 133.16. In this case, the target is 133.86. Price consolidation is in the range of 133.86 - 134.28. For the potential value for the top, we consider the level of 135.26. Upon reaching which, we expect consolidation, as well as a downward pullback.

A short-term downward movement is possible in the range of 132.13 - 131.65. The breakdown of the last level will lead to an in-depth correction. Here, the potential target is 130.98.

The main trend is the upward structure of May 15

Trading recommendations:

Buy: 133.16 Take profit: 133.86

Buy: 134.30 Take profit: 135.25

Sell: 132.13 Take profit: 131.66

Sell: 131.63 Take profit: 131.00

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EUR/JPY to hit 119.01: technical analysis for May 28, 2020

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Having touched the Mitigation Block at 117.36, EUR/JPY is now moving towards the nearest Daily BUY Stop Liquidity Pool of 119.01. We see clearly on the 4-hour chart the odds are that the pair is set to reach those levels. The pair is likely to continue its climb to the area of 119.06 - 119.20 as long as EUR/JPY does not retrace downwards and closes below 117.68.

The overall bias for EUR/JPY is bullish.

(Disclaimer)

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Elliott wave analysis of EUR/GBP for May 28, 2020

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EUR/GBP continues to climb up as expected and a break above minor resistance at 0.9006 will call for a continuation of a rally higher to 0.9085 and 0.9183 as the next minor targets on the way higher. In the longer-term, we are looking for EUR/GBP to reach the former peak at 0.9499 and even break above here for a rally towards 0.9800.

Short-term support is seen at 0.8958 which is expected to be able to protect the downside for the expected break above 0.9000.

R3: 0.9085

R2: 0.9036

R1: 0.9000

Pivot: 0.8958

S1: 0.8941

S2: 0.8923

S3: 0.8908

Trading recommendation:

We are long EUR from 0.8760 and we will move our stop higher to 0.8860

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Elliott wave analysis of EUR/JPY for May 28, 2020

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EUR/JPY continues to climb up towards the wave iii/ target at 119.31 just as we expected it will. As it is approaching the wave iii/ target, we can see the short-term weakness of the sub-rally from 116.98.

In the short-term, we expect minor support at 118.10 to be able to protect the downside for the final spike higher to the ideal target at 119.31 from where a corrective decline to at least 117.35 and possibly to 116.98 would be expected before the next upswing.

R3: 119.74

R2: 119.31

R1: 119.00

Pivot: 118.51

S1: 118.10

S2: 117.67

S3: 117.35

Trading recommendation:

We are long EUR from 115.65 and we will take profit on 75% of our position at 119.20 or upon a break below 118.10

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Gold to go to nearest liquidity void May 28, 2020

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If we look at the 4-hour chart, we can see that the liquidity void bellow the current price for Gold is now at 1704.92-1695.86. It acts as a magnet area for Gold. This scneario has already been confirmed by the CCI (30) that broke through all the 3 level 100, 0, & -100. The CI (30) demonstrates that Gold is likely to decline. This dcenarios will come true if Gold does not break out and closes above the 1714.52 level.

(Disclaimer)

The material has been provided by InstaForex Company - www.instaforex.com

Dollar is in turmoil: several leverage in the currency market

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On Tuesday morning, the US national currency showed a downward trend. The main reason for what happened can be considered the increasing hopes of market participants for a general economic recovery after the coronavirus pandemic, which pushes them to take risks using less reliable currencies in their work. However, tensions also persist amid a worsening conflict between the US and China.

The Australian and New Zealand dollars immediately responded to the current market situation and showed growth in the region of 0.5% on that day, which still did not allow them to approach the maximum values that they were able to reach last week.

The national currency of China, which also immediately responded to the slightest changes in relations between the two largest economic powers, was noted as stable. However, other currencies in the Asia-Pacific region have recorded some growth.

Analysts said that there was a situation where multidirectional pressure is exerted on currency markets, which does not give much scope for action. On the one hand, the conflict between China and the United States of America is forcing investors to stay alert, on the other hand, the gradual lifting of quarantine measures in most countries of the world has a positive effect on the moods of the players, as it hints at the near economic recovery.

The decline in the value of the dollar was recorded in relation to a basket of six major currencies. It lost about 0.23% and reached 99.618. In relation to the national currency of Japan, the yen, the US dollar strengthened slightly: its level amounted to 107.83 yen per dollar.

At the same time. the national currency of Australia has risen in price by 0.5% against the American currency and moved to the line at 0.6571 dollars. New Zealand "kiwi" also rose within these limits and began to be valued at 0.6129 dollars.

The yuan dropped to 7.1326, which was only slightly higher than the lowest level for the last seven months at 7.1435, which was recorded at the end of last week.

Several factors are now driving the dollar: global trade recovery, success in the fight against the COVID-19 pandemic, including news of a vaccine against the virus, as well as pressure from China on Hong Kong to promote its laws. All of these catalysts can have a serious impact on the quotes of the American currency. Demand for the dollar may continue to decline, while investors, on the contrary, received an additional incentive to riskier deals.

The pound also rose by 0.3% last Tuesday and took the mark of 1.2218 dollars. It can be recalled that its value was 1.1185 dollars the other day. The pound was followed by the single European currency, which increased in price by 0.25%: its level was 1.0925 dollars on Tuesday, while Monday's rate was 1.0898 dollars.

The lull in the currency market becomes an occasion for participants to turn their attention to more risky transactions. Thus, the market leaders are the national currencies of Mexico (peso) and Brazil (real), which were able to increase their value against both the pound and the euro by 4% and 5%, respectively. This means that now is the perfect time to restore quotes of "risky" currencies.

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Stock markets in Europe and Asia were in the positive zone

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Yesterday, the stock market in Europe began in the positive zone. The main indexes showed steady growth against the backdrop of the growing impulse of lifting quarantine measures for the COVID-19 pandemic. More and more states are starting up their production again, which is a signal to improve macroeconomic indicators in the world as a whole and in individual countries in particular. Some analysts argue that the worst times have passed; it is hoped that this is indeed so.

The German DAX index added 0.7% today, the French CAC index rose 1.3%. The FTSE index of Great Britain was marked by the highest rise: it increased by 1.7%, which allowed it to regain opportunities lost due to the holidays.

Among the news that noticeably warmed up the stock market in Europe, there was news about a more intensive exit from the quarantine measures of economies in the region. Thus, investors were very happy to learn that the tourism sector, which plays a significant role in the country's economy, has started working again in Spain. After Spain, the German tourism sector is going to come out of the shadows: an approximate date has already been set for the end of bans on tourist travel to more than 30 countries in the region. This should happen on June 15 this year. Of course, after this step, an increase in consumer spending in the eurozone should be noted.

An outside support was the news from Japan, which has completely lifted the state of emergency from all its territories yesterday. The escalating conflict between the US and China also provided an incentive for growth. According to experts, trading on the exchange has revived and continued to gain impulse, driven by positivity from the outside.

The corporate sector was also up. Securities of the German company Lufthansa immediately increased by 6% after the country's government decided to support the air carrier, since it belongs to the sectors most affected by quarantine measures and allocate a tranche of 9 billion euros, or $ 9.8 billion. However, such a subsidy may lead to a further problem in obtaining an opinion from the EU antitrust service. Nevertheless, the company's shares are rising so far.

Other air carriers also expected such support, the shares of which on one expectation of financial assistance showed more than good positive dynamics. Thus, British Airways securities grew by a record 15%. Other companies turned out to be more modest in their growth, but this was already a tremendous result after long stagnation in the market: EasyJet rose by 10%, Ryanair was in the black by 9%, and Air France KLM grew by 8%. Moreover, the Tui group as a whole moved up 18% on news of the near resumption of tourism activities.

The automotive sector in Europe also began to leap back its losses with leaps and bounds. Securities Aston Martin soared by 32%. Renault and Peugeot car manufacturers from France increased more modestly - by 5% and 3% respectively.

As a result of yesterday's trading, the Asia-Pacific stock market also recorded growth, which was justified by hopes for a quick recovery of the economies of its member countries.

Japan's Nikkei 225 Index was up by 2.55%, moving it to its highest value in twelve weeks. Firstly, the reason was the final lifting of the state of emergency from the country. Secondly, the head of the Japanese Central Bank spoke in his speech on his readiness to expand incentive policies and introduce additional support measures to mitigate the consequences of the global COVID-19 pandemic.

Securities of car manufacturer Toyota Motor Corp also grew by 4.2%, SoftBank Group Corp. added 4.3%. On the contrary, the value of Sony shares showed a slight decline, which remained within 0.2%.

China's Shanghai Composite Index was up 1.01%, while the Hong Kong Hang Seng Index climbed even higher - 1.88%. The increase came on the news about additional measures and tools for supporting business from the government.

South Korea's Kospi Index increased by 1.76%. It was followed by the South Korean consumer confidence index, which increased this month to 77.6 points, while it was at around 70.8 points a month earlier.

Australia's S & P / ASX 200 was not out of line with a 2.93% increase. It was supported by information about the government's plans to create more jobs in the country after the coronavirus pandemic.

Thus, the bulk of stock indices in Europe and Asia continues to grow despite the fact that the conflict between the US and China remains unresolved.

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USD/JPY. Helpless yen and passive dollar

The yen continues to trade in a narrow price range against the dollar, despite the rapid news flow. The international scandal surrounding Hong Kong, the mutual threats of Washington and Beijing, the decline in oil prices, additional incentives from the Japanese authorities - these, and many other fundamental factors are ignored by USD/JPY traders. This is partly due to the fact that both the dollar and the yen enjoy the status of protective assets, and the pair de facto stands still amid general nervousness. But analyzing the behavior of the yen in cross pairs, we can conclude that traders are very wary of the Japanese currency. Even the latest news from Japan, which at first glance was supposed to support JPY, simply went unnoticed. This means that the pair retains the potential for its growth, and is now in standby mode, waiting for powerful information that would help the bulls gain a foothold in the 108th figure.

It should be noted here that the bulls ignored a really important fundamental factor. Yesterday it became known that the Japanese authorities allocated the largest package of financial assistance in the world: the total volume of injections will be more than $2 trillion, which is approximately 40% of GDP. In this case, only the United States is ahead of the Japanese, with a total of 2.3 trillion allocated. The structure of Japanese incentives also includes large direct costs, the total amount of which will be about 330 billion dollars. In addition, a package worth $1.1 trillion will be spent on financial assistance to factories and companies, subsidies for rent and medical assistance. This incentive program will be partially funded by the issuance of a public debt of nearly 32 trillion yen in the framework of the second additional budget of the country for the current fiscal year, which ends April 1, 2021.

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All this suggests that the Bank of Japan will continue to keep rates low, while continuing to aggressively buy bonds. Perhaps it was precisely these conclusions that cooled the ardor of bears, who actually ignored such record financial injections from the state. At the same time, similar intentions on the part of the European Commission caused a violent reaction from the European currency (which has significantly risen in price throughout the market). The dollar also rose in price at the relevant decisions of Congress. But the yen showed only a formal and very short-term reaction - the pair decreased by about 50 points only for a couple of hours.

It is also worth recalling that at the beginning of this week, traders calmly reacted to the results of an emergency meeting of the Bank of Japan. But here, the regulator itself did not provide any reasons for volatility: contrary to numerous rumors and fears, the BOJ did not expand the stimulus program and did not lower the interest rate. Kuroda only announced his intentions to extend the loan program from the previous three-month period to the current six-month period. The market was absolutely ready for the implementation of this scenario, and the regulator, in turn, did not bring any additional surprises.

But in general, ignoring the above fundamental factors is indicative. The Japanese economy is in the stage of a technical recession, and this fact, apparently, alarms traders, frightens them from the yen. The dolla behaves in different directions, temporarily becoming more expensive only on spurts of anti-risk sentiment in the market. These bursts are very short-term, so the dollar index over the past few days has fluctuated at the boundary of 98 and 99 figures. We can assume that the market is waiting for the Hong Kong issue to be resolved: in the near future, China should decide on a resonant bill that will strengthen Beijing's influence in Hong Kong, while in Washington they should decide on the response measures that Donald Trump has already announced. According to him, the White House is preparing "something powerful", without specifying what it is about.

But it is worth noting here that if the political conflict between the United States and China does not affect the trade deal that representatives of these countries concluded last year, the market reaction may be short-term. The pair can gain a foothold in the 108th figure, increasing the price level by only one step. But if the conflict goes into the economic plane, then in this case, buyers can count on the range of 109-110.

In other words, the prospects for the pair directly depend on the further steps of Beijing and Washington. And if the actions of China are very predictable (the Chinese parliament will probably adopt the above law), then the US is intriguing. The fate of the pair depends on its resolution.

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From a technical point of view, the situation is also uncertain: on the daily chart, the pair is in the Kumo cloud, between the middle and lower lines of the Bollinger Bands indicator and between the lines of Tenkan-sen and Kijun-sen of the Ichimoku indicator. The bulls need to exceed the upper border of the above cloud (108.50) in order to confirm the strength of the upward movement - until this moment all purchases will look risky. In turn, to confirm the downward movement, the bears need to gain a foothold below 107.00 (the middle line of the Bollinger Bands indicator is at D1), and for greater certainty - go to the middle of the 106th figure. In the meantime, the pair fluctuates between the above levels, any scenario has the right to life: everything will depend on the overall fundamental picture. If we talk about the short term, then on the 30-minute chart the pair will most likely push off from the lower border of the Kumo cloud (107.60) and test the high of 107.96 daily, attempting to storm the 108th figure. But to consolidate in this price area, a sufficiently powerful informational reason is needed, which is not yet available.

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EUR/USD: plan for the European session on May 28 (analysis of yesterday's deals). European Commission plan supported the

To open long positions on EUR/USD, you need:

The European Commission said that they plan to allocate EU assistance worth 750 billion euros, which has provided significant support to the European currency. However, the bears tried to turn the market in their direction when the US session was about to open, which caused the euro to quickly fall and test support at 1.0952, from which I advised opening long positions immediately for a rebound in yesterday's forecast. If you look at the 5-minute chart, you will see how after the breakthrough of support 1.0994 the pressure on the euro intensified, however, the test of 1.0952, which was not reached by just a couple of points, led to a new upward trend, which returned the pair above the 1.1000 area. However, to say that the bulls turned out to be stronger is not entirely true, since Donald Trump is set to announce his decision addressed to China this week, as well as the recent Commitment of Traders (COT) report dated May 19 indicates an increase in short positions, while long positions have partially declined. The report shows an increase in short non-profit positions from 93,840 to 95,194, while long non-profit positions decreased from 171,980 to 167,756. As a result, the positive non-profit net position also decreased and reached 72,562. versus 78,140, which indicates an increase in interest in selling risky assets at current prices. As for the current technical picture of the EURUSD pair, the bulls are aiming for a breakthrough of resistance 1.1030, consolidating on which will definitely lead to a new wave of growth in the region of high of 1.1063 and to the test of larger resistance 1.1093, where I recommend taking profit. Today's German GDP data in the morning can also confuse all cards, therefore, in case the euro falls, it is best to open long positions after forming a false breakout near the middle of the channel 1.0994, or to buy immediately for a rebound from a low of 1.0957 per 20- 25 points within the day.

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To open short positions on EUR/USD, you need:

Sellers failed to keep the pair below 1.0994 yesterday, although the attempts were quite good. Considering that traders only need good news on the next help plan, whether it is accepted or not is not very important for the bull market to continue, today's focus will shift to returning and consolidating below support 1.0994. This will reduce the ardor of buyers and lead to the return of EUR/USD to the low of 1.0952, and then to the test of larger support 1.0917, where I recommend taking profits. If demand for the euro continues in the morning, and this happens only with good data on German GDP, it is best to consider short positions after forming a false breakout in the resistance area of 1.1030, or sell the euro immediately for a rebound from a high of 1.1063.

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Signals of indicators:

Moving averages

Trade is conducted slightly above 30 and 50 moving averages, which indicates a possible continued growth of the euro in the short term.

Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differs from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger bands

A break of the upper border of the indicator in the area of 1.1040 will lead to a new wave of euro growth. The first test of the lower border at 1.0975 may contain the pressure of sellers, but a breakthrough in this area will lead to a sell-off.

Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
  • Non-profit traders are speculators, such as individual traders, hedge funds and large institutions that use the futures market for speculative purposes and meet certain requirements.
  • Long nonprofit positions represent the total long open position of nonprofit traders.
  • Short nonprofit positions represent the total short open position of nonprofit traders.
  • The total non-profit net position is the difference between short and long positions of non-profit traders.
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Forecast for EUR/USD on May 28, 2020

EUR/USD

The euro continued to grow due to information about the proposal of the European Commission a package of economic assistance worth 1.85 trillion. Euro (Next Generation EU) as part of the planned EU budget. Such news is enough for the euro to go another way.

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This path can correspond to the target of 1.1140 along the embedded line of the price channel on the daily chart. The price has overcome the upper limit of the two-month range of 1.0767-1.0995 and is ready to follow above.

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The price has already consolidated above the upper limit of the range on the four-hour chart, the price is above both indicator lines and the Marlin oscillator is growing in the zone of positive indicator values.

Possible purchases of EUR/USD from current levels with a signal on a five-minute timeframe, take profit below 1.1140, stop loss below 1.0995.

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Forecast for GBP/USD on May 28, 2020

GBP/USD

The British pound lost 70 points on Wednesday due to investors' concerns regarding the Bank of England's lower rates towards the negative area. The current rate of the BoE is 0.10%. In addition, UK Brexit negotiator David Frost announced the country's refusal to extend the transition period ending at the end of this year and actually reported the failure of the current stage of negotiations.

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The pound's growth on the daily chart was suspended on the balance indicator line. Currently, the price is at the Fibonacci level of 161.8%. But the price is higher than the MACD indicator line, consolidated above it, and if the signal line of the Marlin oscillator moves to the zone of positive values, the upward trend can be restored with the immediate target of 1.2540 at the Fibonacci level of 123.6%.

The price may return to the downward trend after the price goes below the MACD line (1.2165 - match with the April 7 low). Decreasing goals are also determined by Fibonacci levels: 1.1935, 1.1750.

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The price develops between two signal levels on the H4 chart: its exit above 1.2362 - yesterday's high, opens up the prospect of growth to 1.2540, consolidation below 1.2165 opens the first bearish target of 1.1935.

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Forecast for AUD/USD on May 28, 2020

AUD/USD

The Australian dollar completed another test of its first growth target of 0.6677, after which it closed the day with a decline of 30 points. The situation for the aussie remains twofold - if the first target of 0.6677 is overcome, the price will continue to rise to the second target 0.6820, and if it goes below yesterday's low at 0.6569 will again try to work out the lower price channel line in the region of 0.6470.

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The daily Marlin oscillator signal line is located between the border with the territory of negative values (tendency to fall) and its own forming resistance line, marked in turquoise color.

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The price found support on the MACD line on the four-hour chart yesterday. The signal line of the Marlin oscillator turned up from the border with the declining territory. Current conditions favor continued growth.

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Forecast for USD/JPY on May 28, 2020

USD/JPY

The growth of the USD/JPY pair under the influence of the growing stock market amounted to 22 points yesterday. The price overcame a signal level of 107.78, the growth continued this morning. The nearest target at 108.30 is open.

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The price rises above the balance and lines on the four-hour chart, the Marlin oscillator is also in a growing position in the zone of positive values.

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To confidently continue the upward trend today, it will be useful to track the US data on orders for durable goods (Durable Goods Orders). The forecast for the April indicator is -19.0% versus -14.7% in March. The outlook is negative, it makes it clear that industrial production in subsequent periods will be weak. The release of Durable Goods is better than forecast, preferably and better than the March indicator, will give hope for a moderate drop in subsequent industrial production and market growth.

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USD/JPY testing resistance, potential reversal

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Trading Recommendation

Entry: 107.873

Reason for Entry: horizontal swing high resistance and 78.6% fibonacci extension

Take Profit: 108.087

Reason for Take Profit: Horizontal swing high resistance

Stop Loss: 107.335

Reason for Stop loss: Horizontal swing low support

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NZDUSD pullback to trendline support before any bounce!

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Trading Recommendation

Entry: 0.61499

Reason for Entry: scending trendline support, 50% Fibonacci retracement

Take Profit : 0.62408

Reason for Take Profit: 78.6% Fibonacci retracement, 61.8% Fibonacci extension

Stop Loss: 0.60810

Reason for Stop loss: Graphical swing low

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Hot forecast and trading signals for the GBP/USD pair on May 28. COT report. Bulls hardly stay above 1.2225, which preserves

GBP/USD 1H

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The pound/dollar pair sharply fell and began a strong downward movement on Wednesday, which, however, ended near a new upward trend line, which now supports traders to increase. A rebound from this line and the support area of 1.2196-1.2216 helped the British currency stay in an upward channel, so the pair still maintains prospects for further growth. Moreover, the attempt to overcome the Senkou Span B line was also unsuccessful. Thus, the upward movement may resume on May 28 with the previous goal, the resistance level of 1.2399. Bears will be able to rely on something now only after overcoming the ascending trend line. Although we believe that the pound's fall is still the most likely scenario.

GBP/USD 15M

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The lower linear regression channel turned down on the 15-minute timeframe, which already indicates that the upward trend is about to end on the hourly, and the higher channel is turning down. Thus, there are reasons to expect the pound's fall. But now everything will depend on the upward trend line on the hourly timeframe and the ability of buyers to stay above it.

COT Report

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The latest COT report showed that the total number of buy and sell transactions among large traders per week increased by 29,000, and in equal proportions. Thus, large traders began to more actively trade the pound. This became noticeable by the increased volatility of the pair at the beginning of the current trading week. During the reporting week, professional traders continued to actively sell the British currency (+8303 sales contracts) and were much less active in acquiring purchase contracts (total +4313). Thus, from our point of view, the mood for the GBP/USD pair remains more downward. It is on the basis of this conclusion that we expect the British currency to be sold, although it should be recognized that the pound is still more expensive than cheap this week, but this growth is not strong or confident.

The fundamental background for the British pound remains negative. No macroeconomic reports have been planned in the UK for this week at all, and no important news from Great Britain has been received in the first three days. But news continues to flow like a river in the United States. True, most of this flow has no effect on the pound/dollar pair (as well as the euro/dollar pair) right now. These are the so-called "long-term topics." And they are negative for the US dollar and for America. However, for the US dollar and the country's economy, they may be negative in the long run, and there are already a number of factors negative for the UK economy and the pound. Thus, with any successful opportunity, market participants are trying to get rid of the pound, clearly not believing in its long-term prospects. The US dollar rose in price yesterday, but today's reports on durable goods orders and applications for unemployment benefits can support the British pound.

We have two main options for the development of the event on May 28:

1) The initiative for the pound/dollar pair remains in the hands of the bulls, as they managed to stay above the trend line and above the Senkou Span B. line. Therefore, it is now recommended to buy the British pound, since a rebound was made from the area of 1.2196-1.2216 as well as the Senkou Span B line, with targets near the resistance level of 1.2399. The stop loss level can be placed under the trend line and the support area of 1.2196-1.2216. Take profit is about 130 points in this case.

2) Sellers temporarily lost their positions, but will be ready to join the game below 1.2196-1.2216 and below the trend line. In case you decide to consolidate the price below this area, we recommend selling and aiming for the May 18 low at 1.2073. In this case, take profit will be about 110 points.

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Overview of the GBP/USD pair. May 28. The United States is preparing new sanctions against China if the law "on national

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - downward.

Moving average (20; smoothed) - sideways.

CCI: 16.5484

On May 26, the British pound rose sharply against the US dollar, and yesterday, it also fell sharply. Thus, we draw the same conclusions as before. Buyers of the pound now have very little strength, and there are even fewer fundamental reasons for strengthening the British currency. At the moment, the quotes of the pound/dollar pair have returned to the moving average line, so the trend has not changed to a downward one yet. However, we believe that in the current conditions, it is a new downward movement that is more likely. However, if the price rebounds from the moving average, the bulls will remain in the market and at least one more round of upward movement may follow.

While the pound has resumed its decline, and there is no important news coming from the UK, the United States is blowing for two. Although, it is better to say, "Donald Trump blows for everyone". We have repeatedly written and said that most of the statements, comments, and tweets in social networks from the American President are not confirmed by anything and frankly mislead readers, not being the truth. It seems that even the social network Twitter, through which the American President likes to make statements, made a similar conclusion and under the last message of Donald Trump put a mark "possibly fake". From our point of view, this is just the highest point of absurdity that Trump could reach in his statements. The very same message from the leader of the American nation said that the elections by voting by mail, not only "can", but also "will" be falsified. Trump said that many people will receive ballots regardless of how they got to a particular state. After Trump himself noticed the marking of Twitter, he immediately criticized the social network, saying: "Twitter is now interfering in the 2020 presidential election. They say that my claim about postal voting ballots, which will lead to massive corruption and fraud, is false. Twitter is completely stifling free speech, and I, as President, will not allow this to happen."

At the same time, for the first time in a long time, the main opponent of Trump in the presidential election, Joe Biden, went on the air. Earlier, the two politicians met at a Memorial Day ceremony, where Biden appeared in a protective mask, and Trump himself – without. Naturally, it was not without "pricks" from the current president. Donald Trump expressed surprise that the Democrat put on a medical mask, although only his wife was with him. Later, he retweeted a photo of Biden in a mask, trying to make fun of the politician himself. Joseph Biden responded rather sharply: "He's a fool, an absolute fool. Presidents should lead, not engage in nonsense and show false masculinity. It costs people their lives." Biden also noted that the leader of the nation should set an example to ordinary citizens, which Trump not only does not do but also manages to belittle those who follow the advice of doctors during the epidemic, which has already killed almost 100 thousand people in the United States.

Meanwhile, the conflict between China and the US continues to grow. However, this time we are not talking about a trade standoff and not about Washington's claims to Beijing because of the spread of the "coronavirus", but because of the situation in Hong Kong. Recall that before the pandemic in this district of China, which in 1984 achieved autonomy, there were mass protests against new amendments to the law that allowed the extradition of any resident of Hong Kong to China. These laws were intended to strengthen Beijing's influence in the region. Simply put, China wants to control Hong Kong as completely as possible, which, of course, the US, which supported the protesters, is not happy about. Now that the epidemic has subsided, protests have resumed in Hong Kong against China's already new national security bill, which allows Chinese authorities to apply general legislation in the region, as well as prohibits foreign interference in the territory's affairs. US National Security Adviser Robert O'Brien has already said that sanctions could be imposed against China and Hong Kong if the law is passed. "It seems that with this national security law, they are going to take over Hong Kong, and if they do, Secretary of State Mike Pompeo will most likely not be able to confirm that Hong Kong retains a high degree of autonomy, and if that happens, sanctions will be imposed against Hong Kong and China," O'Brien said. China's actions were also condemned in the UK, Canada, Australia, and the European Union, reminding Beijing that in 1985 a declaration was signed with the UK that guarantees Hong Kong autonomy. It is also reported that the presidential administration is already preparing to impose sanctions on Chinese officials, as well as various companies and financial organizations. Trump himself, during a regular briefing at the White House, announced measures against China over Hong Kong: "We're doing something right now. I think you will find this very interesting, but I will not talk about it today, I will talk about it in a few days. I think it will be very powerful." The official representative of the Chinese Foreign Ministry said in turn that Beijing will continue to protect China's national interests. "We will resolutely not allow foreign political forces to interfere in Hong Kong's affairs," the Foreign Ministry said.

While passions are raging in the United States, the Foggy Albion remains complete news "calm". For the entire current week in the UK, not a single macroeconomic report is planned. Thus, today, traders will have to pay attention only to American statistics, which will be quite a large number. The most interesting and important reports will be on applications for unemployment benefits and on orders for durable goods. From the UK, we are waiting for new information about the future plans of the Bank of England, as the latest information indicated that the regulator may introduce negative rates, which greatly scared buyers of the British currency, which are now so few in the market.

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The average volatility of the pound/dollar pair has increased due to the last two days and is now 101 points. However, this is still a low value for the British pound. On Thursday, May 28, thus, we expect movement within the channel, limited by the levels of 1.2148 and 1.2350. A reversal of the Heiken Ashi indicator upwards will indicate a possible new round of upward movement. Fixing the price below the moving average will confirm some randomness of the recent growth of the pound.

Nearest support levels:

S1 – 1.2207

S2 – 1.2146

S3 – 1.2085

Nearest resistance levels:

R1 – 1.2268

R2 – 1.2329

R3 – 1.2290

Trading recommendations:

The pound/dollar pair adjusted to the moving average on the 4-hour timeframe. Thus, today it is recommended to trade the pound/dollar pair for an increase with the goals of 1.2329 and 1.2350, in the case of a reversal of the Heiken Ashi indicator up. It is recommended to sell the pound/dollar pair when the bears manage to return to the area below the moving average, with the first targets of 1.2207 and 1.2146.

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Overview of the EUR/USD pair. May 28. The European Commission has prepared a new EU economic recovery plan for 750 billion

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - upward.

CCI: 81.5859

The EUR/USD currency pair spent the third trading day of the week in a new round of upward movement, which was quite unexpected. However, at the end of the day, we still cannot conclude that the pair has crossed the upper limit of the side channel of 1.0750-1.1000. There was a false breakout, but by the end of Wednesday, the pair's quotes fell back from the highs of the day. Thus, the option with a downward movement to the level of 1.0750 still retains its prospects. At the same time, we do not recommend completely excluding the option of forming a new upward trend. If a confident and unambiguous overcoming of the area of 1.0990-1.1008 happens, then the bulls can continue to develop their success.

In the final article over the past day, we said that traders once again ignored a rather important event, namely the speech of ECB President Christine Lagarde, during which she announced a stronger contraction of the European economy by the end of 2020 than originally planned. However, this is not all the information available to traders on Wednesday. It became known that the European Commission is preparing a new plan for the economic recovery of about 750 billion euros. This was stated on May 27 by European Commission member Paolo Gentiloni. Of these 750 billion euros, it is proposed to distribute about 500 billion in grants and another 250 billion in loans. This plan will be officially presented by the head of the European Commission, Ursula von der Leyen, in the near future. Earlier, French President Emmanuel Macron and German Chancellor Angela Merkel proposed to create a recovery fund for 500 billion euros, the funds from which will be distributed in the form of grants, that is, on a non-refundable basis. And this plan was immediately criticized, since Austria, Denmark, the Netherlands, Sweden, and Finland do not consider it right to give money away for free. We also remind that no plan can be adopted without the approval of all 27 EU member states. Thus, the main issues that need to be resolved in both of these plans are mainly in the form of assistance. The most economical and strict countries believe that it is necessary to provide assistance in the form of loans. The countries most affected and in need of assistance are willing to receive grants. In addition, there is the so-called "Northern plan", which was presented by Austria, Denmark, the Netherlands, and Sweden. These countries believe that aid should be allocated exclusively on the terms of concessional lending, otherwise, the least disciplined economies will regularly use the financing of those countries that are economically stronger and more economical. At the same time, even soft loans, according to the "northerners", should be provided only on the condition of large-scale reforms and strict compliance with budgets. The authors of the "Northern plan" are unequivocally opposed to any increase in the EU budget.

Certain details of the future financial assistance plan, if approved, have also been released. For example, Italy and Spain will receive about 40% of 750 billion euros. Approximately half on the terms of concessional lending and on gratuitous terms. According to some experts, grants will also be distributed according to the priority of the "green economy" - the EU's plan to reduce carbon emissions to zero by 2050. Thus, those sectors of the economy, in other words, enterprises that try to comply with EU standards, will have a better chance of receiving assistance. It is also reported that the European Commission has identified three main priority areas for economic recovery: updating the residential and industrial sector of buildings; the use of energy-saving technologies in it; financing alternative energy and hydrogen fuel projects; the development of "clean" transport and electrified railways.

However, in the case of the new plan of the European Commission, the problems are still the same. The main question, of course, is where to get these 750 billion euros? Recall that not only the UK will suffer from the "break" with the EU. The alliance will also lose about 13 billion annually from the "break" with the UK. Given the fact that the pandemic has had a negative impact on all EU countries, it is unlikely that these funds can be raised by increasing contributions. Thus, again, they can only be obtained by loans or by raising certain taxes. However, even taking into account the possible tax increase, experts believe that it will not be possible to collect 750 billion euros. And some members of the block also oppose the use of borrowed funds for the formation of the fund. Thus, this plan can also be buried on the sidelines of the European Commission.

On the fourth trading day of the week, the European Union again does not plan any important macroeconomic publications. However, there will be something to pay attention to in Germany and the United States. The consumer price index for May will become known in the locomotive of the European economy, which threatens to slow down even more and reach 0.6% y / y according to preliminary values. In the US, an important report on orders for durable goods will be released on this day. According to expert forecasts, the overall figure will decline after March -14.4% by another 19%. The index of orders for capital goods excluding defense and aviation may lose 10%, and orders for goods excluding transport may lose about 14% in April. Thus, this report may cause a drop in demand for the US dollar during tomorrow's US trading session. However, we should also note the next report on applications for unemployment benefits overseas, which in recent months has become almost the number 1 report in the United States. According to the new data, the number of primary applications for benefits in the week up to May 22 will be 2.1 million, and the total number of secondary applications for benefits in the week up to May 15 will be 25.75 million. Many experts and traders believe that the second indicator most accurately reflects the current unemployment rate in the country. And as we can see, its growth rate is slowing down, the increase in secondary applications for the week may be only 700,000. Also scheduled for this day are reports on personal consumption expenditures and pending home sales transactions. However, these data did not cause any reaction even in normal and quiet times. Now they will be ignored with a 100% probability.

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The average volatility of the euro/dollar currency pair as of May 28 is 76 points. Thus, the value of the indicator is characterized at this time as "average". Today, we expect the pair to move between the levels of 1.0906 and 1.1058. The reversal of the Heiken Ashi indicator downwards signals a very likely resumption of the downward movement to the lower border of the side channel of 1.0750-1.1000.

Nearest support levels:

S1 – 1.0925

S2 – 1.0864

S3 – 1.0803

Nearest resistance levels:

R1 – 1.0986

R2 – 1.1047

R3 – 1.1108

Trading recommendations:

The EUR/USD pair made another round of upward movement within the side channel and again stopped near its upper border. Formally, buy orders are currently relevant since the price is located above the moving average. However, we do not recommend opening buy positions until the area of 1.0986-1.1008 is successfully overcome. It is recommended to return to selling the pair if the price is re-anchored below the moving average line with the goals of 1.0864 and 1.0803.

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USD/CAD reaching 1st support, potential bounce !

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Trading Recommendation

Entry:1.3735

Reason for Entry: 127% fibonacci extension

Take Profit :1.3873

Reason for Take Profit: Horizontal swing high resistance, 38.2% fibonacci retracement

Stop Loss: 1.36443

Reason for Stop loss: 161.8% fibonacci extension

The material has been provided by InstaForex Company - www.instaforex.com

Hot forecast and trading signals for the EUR/USD pair on May 28. COT report. Christine Lagarde and Luis de Guindos outlined

EUR/USD 1H

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The EUR/USD pair again worked the upper border of the side channel of 1.0750-1.1000 on the hourly timeframe during the third trading day of the week, from which it has not left in recent weeks. And at the same time, traders failed to overcome not only the 1,0990-1,1008 area, which is considered to be the area of the upper boundary of the channel, but also the Kijun-sen line, which did not allow the pair to go down at the next entry to the downward movement. Now the downward prospects of the pair are not bright. Despite the fact that buyers returned to the resistance level of 1,1006 and to the previous day's high, we still believe that the bulls can retreat at any time, and the pair could fall down. It did not confidently overcome the area of 1,0990-1,1008. However, now an upward trend line is also built on the hourly chart, which provides support for traders to rise.

EUR/USD 15M

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We see how buyers completely dominate the market on the 15-minute timeframe in the last trading day. Both channels of linear regression are directed upward, clearly signaling the upward trend of the pair. There are still no signs of a reversal of any channel. However, everything, as before, depends on the area of the psychological level of 1.1000, from which the pair can rebound again.

COT Report

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The latest COT report showed that large traders who trade for foreign exchange earnings, and not for hedging and current activities, continued to reduce euro purchases and increase sales in the reporting week. The growth of the latter was small, only 1257 contracts, but in aggregate with -3425 contracts for sale, we have a serious deterioration in the mood of traders regarding the euro. The total number of purchase contracts also decreased by 294 units, and the number of short-deals increased by 970 units. Thus, we see that the mood of traders remains bearish and only intensifies. However, trading this week shows that the US dollar was not able to extract dividends from this, and trading continues to be held in favor of the euro. True, at any moment the pair may crash on the basis of technical reasons.

The fundamental background for the pair at this time remains neutral. Neither the euro nor the dollar now enjoy a clear advantage in the foreign exchange market. Market participants ignored Christine Lagarde's speech from yesterday, although the head of the European Central Bank said potentially important things, for example, updated forecasts for the economic decline in 2020. In addition to Lagarde, ECB Vice President Luis de Guindos also spoke on this day, who said that some countries may not be able to cope with the debt burden created by the ECB and EU recovery programs as a result of the coronavirus epidemic, and may even leave the eurozone. "The increase in public debt adds even more to the already high levels of debt in some countries," said the ECB vice president. He also noted that Spain and Italy are at greatest risk, and the total debt of the eurozone will grow to 103% of GDP following the crisis. Thus, such messages could trigger a sell-off of the euro, but no. On Thursday, the most important reports are planned in the United States, which will publish data on orders for durable goods and applications for unemployment benefits.

Based on the foregoing, we have two trading ideas for May 28:

1) It is possible for the pair to grow further if the buyers confidently overcome the levels 1,0990 and 1,1006. Thus, for new purchases of the euro, we recommend that you wait for this condition to be met. Then the buy-positions will become relevant with the objectives of the resistance level of 1.1111 and the March 27 high at 1.1147. Potential to take profit in this case will be from 80 to 110 points.

2) The second option - bearish - is more likely. You are advised to expect a rebound from the area of 1,0990 - 1,1008 again. However, as the bull positions improved over the previous day, we also recommend waiting for the Kijun-sen (1.0951) critical line to be overcome and a new short-term upward trend line, and only after that the Senkou Span B line (1.0891 ) and the long-term upward trend. Potential to take profit is 20 and 90 points.

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China will lower yuan below $7.20

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Despite the general positive, which for some reason the markets live by, it is impossible not to notice that the USD/CNY pair is attacking the 2019 high. Will the friction of the United States and China lead to the fact that the latter cannot stand it and pull the trigger, enabling the yuan to fall?

The US dollar to both RMB (external and internal) approached the highest levels, and this is not due to the strengthening of the US currency. The dollar is getting cheaper on all fronts, both to developed and developing currencies. Official Washington announced plans to respond by the end of the week to China's announcement of a new national security law for Hong Kong. Investors should, with bated breath, monitor the development of events and the behavior of the USD/CNY pair. Instead, markets chose to win back the hope of a vaccine and economic recovery after the gradual removal of quarantine.

I wonder what reaction will follow to the possible departure of the USD/CNY rate above 7.20. The pair came as close to this mark as possible. If you look back, you can recall how the currency policy of China had rattled world markets in August 2015. The echo effect of the same policy was observed by the markets until the end of 2016.

USD/CNY

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China and the United States are waging a trade and technological war, which is exacerbated by the coronavirus pandemic. Preliminary arrangements between the two largest trading partners of the world on the verge of collapse. Moreover, a new battlefield may appear - investing capital, Crossborder Capital CEO Michael Howell warned in a CNBC interview.

Governments and global central banks have deployed unprecedented stimulus packages in an attempt to offset the economic shock from the pandemic. In March, the US president approved a historic bill worth $2 trillion. Meanwhile, demand for the dollar as a safe asset grew amid an outbreak, causing a deficit and putting pressure on other currencies. In response, the US Federal Reserve expanded its dollar swap lines by adding lines to more central banks, including Australia, South Korea, and Brazil. This was done so that more institutions could gain access to dollar financing.

American politicians most likely have ulterior motives in order to make their national currency more accessible internationally.

"The decision to exchange dollar swap lines with 14 other countries, actually creating a group of 15 countries, including America, which have access to dollars, is a crucial event," Howell said in an interview with CNBC.

He also called the move "the economic equivalent of NATO," which was once created to contain the Soviet Union military. Now the US is trying to economically restrain China.

America and China are competitors, it is impossible not to notice. China seeks to play a more important role on the world stage. The pandemic crisis simply accelerated the process.

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